How to Rework Your Personal Budget For The COVID-19 Pandemic

10 Apr, 2020
  • Written By: Mimi Anane-Appiah

The world is currently battling the COVID-19 pandemic and due to its speed of transmission as well as its overwhelming effect on healthcare systems, many governments have had to take the bold step to lock down their countries partially or completely as well as close borders. Unfortunately, these measures continue to have a negative effect on economies as economic activity and productivity have slowed down. According to the International Labour Organisation, about 25 million workers are expected to be laid off globally. In Ghana, the hospitality industry has already been adversely affected by the pandemic and some hotels have been forced to shut down either partially or completely.

This puts enormous pressure on the finances of people across the globe. Having an emergency fund will greatly determine how individuals and families will stay afloat financially during this period. However, all hope is not lost if you do not have one. Individuals and families should put in place measures to manage their scarce resources during these times. The following tips will help you budget to meet your basic needs. Remember, that we are in unusual times and the primary goal for this period is to SURVIVE:


I. Assess all Sources of Income

Consider all your sources of income and list them. A few examples are your Salary/Remuneration, Returns from investments and Rental income. If there is no source of income or savings at all, it is important to identify other sources of potential cash inflow as well. These may include donations, online businesses and provisions of delivery services. The importance of this step is to determine how much you have available to aid in an effective expenditure planning process. 


II. Prioritize Essential Spending

It is important to plan your spending with the involvement of all household members to ensure effectiveness and to keep your expenses below your income to avoid debt. Categorize your spending and focus on the essential items such as food, utilities, shelter and transportation.

Food is an essential expense item in your budget. It is important to prepare your shopping list and stick to it. Plan how much you wish to spend on each food item and ensure you are not buying more than what you need. If you have the means, opt for bulk purchases as well as staple foods which are relatively cheaper to reduce cost.

Shelter is most likely your biggest expense item if you are renting. Considering the fact that most people settle rent payments in advance for a year or two, this may not be a problem unless your rent is due. If your find yourself in this situation and don’t have enough funds to settle your bills, have a genuine discussion with the property owner to agree on a workable payment plan. The reality of the situation is that, due to restrictions, looking for another place with cheaper rent may be difficult.

Your transportation cost during the lock down may reduce drastically. However, you may need to budget for trips to get your basic needs. If you are an essential worker, you will need to consider the cost of travelling to and back from work.

Finally, your consumption of various utilities such as electricity must reduce as much as possible. Take advantage of the subsidies to make room for extra savings. If you have any debt obligations, talk to your creditors to defer your payments if possible, however, if you can afford it, continue paying. 


III. Start or Build up your Emergency Fund

If your income hasn't been affected yet, this is a good time to quickly build or top up your emergency fund. The purpose of an emergency fund is to cover 3 to 6 months of your living expenses in the event of job loss or illness Assess your exposure to the risk of losing your job. The higher the risk, the more you need to save as quickly as possible to cover basic expenses should you be laid off or have your income reduced. You can do this by reducing your current expenses to make room for additional savings. Keep your funds in easily accessible forms to avoid any liquidity issues. You can either keep funds in a current, savings account or an easily accessible money market mutual fund.

IV. Preserve your Retirement Funds
It is not prudent to withdraw from your retirement savings to settle short-term expenses. It is rather advisable to fall back on your emergency fund, rainy day fund or your short-term investments. If your income has not been affected, it is important to continue contributing towards your retirement goals. However, if your income has been affected, you can either reduce or halt your regular contributions till you can afford to continue. You may contact your financial planner or retirement advisor for any further assistance.


Overall, the impact of this pandemic on your personal finances is dependent on a number of factors such as the industry you work in, number of household income streams and availability of an emergency fund. However, maintaining strict adherence to your reviewed budget and practicing the tips outlined in this article will increase your chances of staying afloat during this pandemic. During these times it is important to remain optimistic about your prospects. This too shall pass.




Axis Pension Trust partners workers throughout their retirement planning journey to ensure they are on track to achieve a dignified retirement. For more information on our services or general enquiries, send an email to This email address is being protected from spambots. You need JavaScript enabled to view it. or call 030 273 8555.

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1 comment

  • Comment Link Violet Mensa-Bonsu Tuesday, 28 July 2020 20:33 posted by Violet Mensa-Bonsu

    Useful points Axis. Thanks.


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